The First American Sugar Tax

One year ago, a new and never before seen tax was introduced in Berkeley, California. The tax targets sugary soft drinks by adding an extra 10% to the pre-tax price, also measured as one extra penny for every fluid ounce. The average can of cola is 12 cents more expensive, while the price of a two litre bottle has increased by 68 cents. It is well known that high consumption of sugary drinks can lead to adverse health effects, such as obesity, type 2 diabetes and heart disease. The desired effect of this tax is to reduce the amount of sugar the population is consuming, especially children and young adults.

A recent study has shown that this tax is making positive changes, as sales of sugary drinks in Berkeley have dropped by 10% since the tax’s inception, while sales in the region not effected by tax rose by just under 7%. Berkeley is a city known for its wealthy and educated population, so this may also be a factor in the consumption drop. Researchers cannot confirm a direct correlation, but over this past year the sale of bottled water has risen 15%.

Canada is also working on instituting a sugar tax of their own . A study released recently by the University of Waterloo estimates that a 20% tax on companies that make sugary drinks could save the lives of more than 13,000 people over the next 25 years. This would also amount to $11.5 billion in health care savings, and generate $43 billion in revenue for the government.

“We know Canadians – including our children – are consuming too much sugar and sugary drinks in particular are harming our health. These products are not essential groceries, providing little to no nutritional value, and a levy is one proven way to reduce consumption and support healthy living initiatives,” says Mary Lewis of the Heart and Stroke Foundation.

To read more about the Berkeley tax, click here. For more about how this issue may affect Canadians, click here.